Media Institutions: Ownership, Regulation, Regulation, and globalization

Page 1: The Political Economy of Communications

The political economy of communications investigates how forces controlling cultural production and distribution affect the public sphere. Key concerns include the patterns of ownership within media institutions and the relationship between communications institutions and state regulation.

Page 2: Introduction to Media Institutions

A political economy approach examines the production of cultural goods, institutional and governmental regulation, and the link between media representations and production conditions. Information regarding media policies and finances is frequently confidential, making academic research difficult. There is a structural contradiction between freedom of communication and a free market where commodities are prioritized over public goods.

Page 3: Market Ideology vs. Social Morality

Western beliefs in democracy support a free market and media plurality, yet this often conflicts with ideological imperatives to protect social morality or specific groups. Neo-Marxists and political economists argue that a marketplace dominated by a few corporate institutions does not best serve society or a free exchange of ideas.

Page 4: Defining Media Institutions

Media institutions are more than just text producers; they encompass business functions such as finance, distribution, exhibition, and retailing. Understanding these institutions requires looking at their identity as commercial enterprises, their relationship with the advertising industry, and their interactions with government and new technology.

Page 5: Varieties of Institutional Models

Media institutions include non-commercial entities like the BBC (a public service broadcaster) and trust-run organizations like The Guardian. Other significant institutions operate in the background as enablers, such as the advertising agency WPP, the press agency Associated Press, and the cable operator NTL. The Net complicates these definitions as it serves as both a distribution carrier and a communication platform.

Page 6: Characteristics of Dominant Institutions

Dominant institutions often exhibit vertical integration, multi-nationalism, lateral integration (conglomeration), and diversification. In the British media, a pattern of capitalist competition exists where market leaders typically control $70\%$ of their respective sectors. Vertical integration allows companies like NewsCorp to control production, distribution, and exhibition simultaneously.

Page 7: Multi-nationalism and Conglomeration

Multi-nationalism allows media companies to operate across borders, making them difficult to regulate or tax. Conglomeration involves buying similar businesses to dominate a sector, such as the merger of Granada and Carlton into ITV plc. Lateral integration refers to expansion across different types of media, exemplified by the Walt Disney Company’s ownership of ABC network, movie studios, and magazines.

Page 8: Economic Drivers and Models

Media organizations prioritize profitability, economies of scale, and market control. Nicholas Garnham defined three economic models: the editorial model (direct goods like CDs), the press model (collective goods with repeat sales like newspapers), and the flow model (continuous supply like broadcasting).

Page 9: Media Finance and the BBC

Media income is derived via direct purchase, access charges (box office), and indirect support (advertising). The BBC is uniquely funded by a licence fee of $£121\,per\,annum$, generating approximately $£2.5\,billion\,a\,year$. Most other British media rely heavily on advertising, with newspapers deriving $30\%$ to $70\%$ of their income from this source.

Page 10: Film and Television Industries

The British film industry is fragmented and relies on US majors for finance; major Hollywood films cost an average of $US\$50,000\,to\,US\$100,000$ to produce and promote. In contrast, British TV depends on advertising, co-productions, and program sales, such as the $£248\,million$ in sales to the USA and Canada in $2002$.

Page 11: Significant Cost Elements

Media expenditure focuses on promotion ($1/4\,to\,1/3$ of film budgets), labor (star salaries), and new technology. New technology is an investment used to achieve economies of scale and increase competitiveness. Competition from cable and satellite reduced US Network audience share from $91\%$ in $1978-9$ to $40\%$ in $1996-7$.

Page 12: Media Interaction with Society and Audiences

Media institutions operate within a context of other powerful organizations, including government, law enforcement, and education. To satisfy advertisers, media institutions objectify audiences, treating them as quantitative data and consumers rather than a disparate collection of individuals.

Page 13: The Institution-Audience Relationship

The relationship between institutions and audiences is unequal. Institutions define the terms of participation and control access. While small-town newspapers once modeled community responsiveness, large-scale media producers conceptualize audiences in large categories, which is an enactment of media power.

Page 14: Radical Media and Advertising

James Curran argues that private media must maintain public legitimacy and staff professional concerns to avoid total subordination to shareholder interests. However, the media economy is deeply symbiotic with the advertising market. Quality newspapers rely on advertising for two-thirds of their revenue, while tabloids rely on it for one-third.

Page 15: The Ideology of the Marketplace

Advertising underwrites the dominant ideology and the status quo. Because advertising does not support radical material, there is no left-wing national daily newspaper in the UK. The rise of multi-channel providers saw Sky TV profits increase from $£51\,million\,to\,£283\,million$ between $2000\,and\,2003$.

Page 16: Media and Government

Government and media share a relationship of mutual self-interest. Government uses media to disseminate policy, while media relies on government as a prime source of information. Broadcasters often operate under a liberal pluralist position, accepting government regulation through statutes and charters.

Page 17: Regulation and Public Interest

Regulation aims to prevent media controllers from gaining excessive power. There is a frequent conflict between the media’s "right to know" and individuals' right to privacy. Government self-interest can manifest in the restriction of information, such as the US military stopping footage of flag-draped coffins in $1991$.

Page 18: Constraints on Institutional Practices

Censorship is rare outside of wartime, but regulation occurs through four main constraints: Law, Finance (market performance), Professional practices, and Public responsibility. Most regulation is actually a process of self-regulation based on institutional values and fear of legal consequences.

Page 19: Regulatory Bodies and Ofcom

Key British self-regulatory bodies include the BBFC (movies), the PCC (press), and the ASA (advertising). In December $2003$, Ofcom took over the work of several regulators, including the ITC and the Radio Authority, to oversee broadcasting, telecommunications, and radio frequencies.

Page 20: Legal Regulation of Content

Laws protect vulnerable audiences and interest. Examples include the Defamation Act 1996, the Obscene Publications Act 1959 (extended to broadcasting in $1991$), and the Young Person’s Harmful Publications Act 1955. These laws aim to maintain security, good taste, and fair trials.

Page 21: Statutes and Social Norms

Additional legal constraints include the Official Secrets Act 1989, the Public Order Act 1986 (forbidding incitement of racial hatred), and the Video Recordings Act 1984. Regulatory norms change over time; for instance, the word 'fuck' caused an uproar on TV in $1965$ but became more accepted in later contexts.

Page 22: Institutions and Power Dynamics

Institutional power stems from a material base (finance, technology, and legal resources) and a symbolic base (texts and meanings). Nicholas Garnham identifies two kinds: structural power (allocation of resources) and economic power (corporate behavior in the market).

Page 23: The Reach of Media Moguls

Market trends lead to monopolies. Rupert Murdoch’s NewsCorp owns $175$ titles on three continents and acquired control of DirecTV (reaching $10\,million$ subscribers) in $2003$. Such concentration of ownership limits actual choice and challenges pluralism.

Page 24: Professionalism and Political Influence

Silvio Berlusconi controls $48\%$ of Italian television and has a massive publishing presence through Mondadori. In media institutions, professionalism serves as an ideology that supports the authority of the worker and justifies production routines. A small number of unelected media workers represent the world to millions.

Page 25: Ideological Effects and Power

Media power includes directing public attention, persuasion, and structuring definitions of reality. Even non-political programs like game shows (e.g., The Weakest Link) promote ideologies regarding competitiveness and the desirability of material goods. The media imperialism thesis suggests US ideational exports promote Western capitalism globally.

Page 26: Globalization and National Identity

Globalization involves a trans-national reach in finance, ownership, and products. While cultures consume global products like Coke and US movies, they often interpret these meanings through their own cultural frameworks. James Collins notes that national sovereignty is increasingly challenged as economic and cultural production becomes transnational.